Tesla (NASDAQ: TSLA) continued rebounding on Monday, rising nearly 2% after a 6.2% surge on Friday that saw the stock reclaim its 200-day moving average.
However, David Giroux, one of the leading fund managers whose Capital Appreciation Fund (PRWCX) has delivered a 52-week average return of 11.23%, is not impressed with the automaker.
The T. Rowe Price veteran warned in a recent Barron’s roundtable that many big-name stocks, including not only Elon Musk’s golden goose but the likes of Palantir (NASDAQ: PLTR) as well, are overvalued:
“Tesla could fall 90% tomorrow, and I wouldn’t buy a share, because it’s just crazy overvalued.” — David Giroux
Is Tesla overvalued?
At press time, August 26, Tesla shares were trading at $346.40 (more than 200 times earnings), down 0.50% in pre-market.
The stock’s recent rally was fueled by optimism regarding the company’s global expansion, particularly in China.
Despite economic challenges and trade wars affecting the East Asian country, the electric vehicle (EV) manufacturer continues to carve out its market share, supported by strong Model Y demand and steady output from its Giga Shanghai plant.
Musk’s ambitious timeline for Full Self-Driving (FSD) remains a major bullish driver as well, given that any notable progress in driving autonomy could add support to Tesla’s valuation and potentially position the stock for an unprecedented run.
Giroux’s skepticism is thus mostly the result of Tesla’s slowing EV sales in the U.S. and intensifying competition from abroad, further bolstered by skepticism regarding the proposed robotaxi roadmap.
Featured image via Shutterstock
